Magic Eden NFT marketplace at the centre of Solana NFT landscap
NFTmemo by Mattbullish - synthesis of NFT news & investments, interesting projects, overview of NFT activity on Ethereum and Solana blockchains and weekly analysis: Magic Eden NFT marketplace on Solana.
News
Largest-ever NFT-backed loan backed by 101 CryptoPunks (link)
Anonymous buyer purchased World of Women NFT via Moonpay for $754,000 at Christie's auction (link)
SEC having a closer look at NFT space for potential security violations (link)
Treasure NFT marketplace attacked via exploit that allowed hackers to get several listed NFTs for free, most of which were later recovered (link)
CryptoPunk #5364 donated to UkraineĀ“s campaign (link)
Ukraine to issue NFT collection to fund armed forces (link)
CryptoPunks Owner boasts of 'rugging' Sotheby's, NFT auction canceled (link)
Tweets
Jason Choi, takeaways from talking to 50+ web3 metaverse companies (link)
Loopify, current thoughts on the NFT market (link)
Ukraine official acc., confirmation of airdrop for donations to Ukraine (link)
Mykhailo Fedorov, cancellation of airdrop and announcement of NFTs (link)
Richerd.eth, Manifold Merch Bridge for redemption of merch via NFTs (link)
Project updates &NFT integration
MetaPortal, project by EnterDAO, released $GAME NFT gaming index (link)
Rakunen, japanese e-commerce firm, announced launch of own NFT marketplace (link)
DeFrag, non-custodial liquidity protocol allowing borrowers to use NFTs as collateral, announced strategic partnership (link)
Investments
Karmaverse, GameFi multiverse project, raises $6M, private round (link)
NFT3, unified decentralized identity & credit network raises $7.5M, seed & strategic rounds (link)
Gamespad, gaming NFT & metaverse ecosystem, undisclosed investment (link)
DNABLOCK, design & mint NFT avatar platform, raises $7M, seed round (link)
X Rush, GameFi project, raises undisclosed investment, $10M valuation (link)
Web3Games, integrated blockchain gaming platform, raises $4M, seed round (link)
Nifty League, NFT gaming metaverse, raises $5M, seed round (link)
Pianity, music NFT marketplace, raises $6.5M, seed round (link)
Ignite Tournaments, P2E mobile esports tournament organization & streaming platform, raises $10M, seed round (link)
Sandstorm, platform connecting metaverse NFT builders & brands, raises $2.5M, seed round (link)
Rarify, API provider enabling creation, management & scaling of blockchain-agnostic NFT products, raises $10M, series A, $100M valuation (link)
Project watchlist candidates
Backdrop, helps participate in tokenized communities, creates your profile after connecting a wallet, allows you to discover new communities etc.
Genie, NFT market aggregator that allows to batch buy & list NFTs across all major marketplaces in a single transaction
Ethereum blockchain - continuing weekly NFT USD volume downtrend, the week of 28/2 OpenSea volume 694.83M vs. week of 21/2 1039.24M, a ~33% decrease (LooksRare volume ignored due to wash trading). The amount of transactions in week of 28/2 with 0.85M transactions slightly dropped by ~15% compared by to previous week with 1.01M transactions.
Weekly NFTs volume by marketplace [USD, 3m]
Weekly NFT transactions by marketplace [#, 3m]
The current breakdown of NFTs by category in Nansen NFT-500 Index is dominated in terms of value by social NFT projects that represent 76% of the marketcap. In the last days all categories follow the overall NFT market movement and continue to decrease in value as the NFT market cools in my opinion partially also because of the Russia-Ukraine conflict negative sentiment.
Marketcap per NFT category, Nansen NFT-500 Index [ETH, 1m]
Nansen NFT-500 Index = broad market index tracking the market activity of NFTs on the Ethereum blockchain, consists of 500 NFT collections weighted by market cap representing cca 85% of daily market volume since 1/1/22, rebalanced every 30 days. It can be used to track how different NFT categories develop over time in terms of market cap and in comparison with other Nansen NFT indexes (bluechip, social, games, art) to compare how individual NFT categories retain value over time.
Solana blockchain - there is not yet that much available data on USD trading volumes of NFTs on Solana blockchain, but DappRadar reports in terms of last week a ~37% and 33% drops in 2 biggest marketplaces Magic Eden and Solanart compared to previous week. Continuing downtrend is visible also in terms of daily transactions.
Daily NFT transactions of popular programs [#, 3m]
Magic Eden NFT marketplace
štl;dr: Bullish. Magic Eden NFT marketplace dominates the Solana NFT landscape and gets a lot of things right - competitive transaction costs and unique features, community-friendly approach, own launchpad, strong partnerships including DEX Raydium & gaming projects or recent launch of MagicDAO airdropping Magic Ticket NFT gate-keeping token to most active users. Worth further monitoring.
NFTs on Solana
Solana NFT ecosystem exploded in 2021 and has grown ever since with cumulative unique Solana NFT ownership reaching to around 2.59 million today.
The volumes of NFTs minted per day seem pretty consistent during last few months, however are also subject to a recent cooldown of the overall nft market.
First NFT collections appeared on Solana in March 2021. A good summary on NFTs on Solana can be found here.
Magic Eden NFT marketplace
Magic Eden has become the leading NFT marketplace on Solana blockchain. When looking at the platform I had a brief look at its features, approach to creatures and their own launchpad, partnerships activity and numbers. Magic Eden raised $2.5 million investment in seed round in October last year.
Team
The marketplace was started by 4 co-founders, Jack Lu, Zhuoxun Yin, Sidney Zhang, and Rex, who are a group of friends from Silicon Valley with diverse backgrounds and prior work experience in Facebook, Uber, Google, Coinbase, FTX, dYdX, Amazon, Bain & Company, and Boston Consulting Group (BCG).
Features
On features and user conditions level I believe Magic Eden is very competitive. Listing NFTs on Magic Eden is free for users and the transaction fees are quite low at 2%. Magic Eden is also first platform to introduce features such as rarity index or own launchpad. Creators can also take advantage of both dutch and english auctions functionality along with many other interesting features. Some users may also appreciate the support of Japanese, Vietnamese, Turkish, Korean or Russian languages. Last month Magic Eden also rolled out beta version of their Android App.
Approach to creators, mint authority, & launchpad
Creators can list their collections by uploading materials to Creator Portal. Creators can also apply for Magic Eden Launchpad, where they can create and sell NFTs, get full-service NFT minting support or outbound marketing support. One of the examples of (gaming) projects rolled out via launchpad is Mini Royale Genesis drop by Faraway.
Magic Eden also rolled out last year Mint Authority - self-service minting solution for creators and easy way for collectors to discover upcoming mints.
Unlike OpenSea, Magic Eden was recently forced by rug pulls to invoke doxing policy for creators. This could make NFT trading on the platform safer, however also dissuade some creators from listing their projects on the marketplace.
Partnerships
Actively looking for large partnerships can bring a lot of value for users. Magic Eden concluded partnership with Raydium that offers creators liquidity and exposure for their NFT collections that gave birth to Raydium NFT platform. The platform also looks for partnerships in the gaming space. Among other the projects can use the launchpad for their NFT collections.
Gaming
Solana can be considered ideal gaming platform due to its super-fast speed and low fees. Trying to take advantage of this and active focus on gaming space is in my opinion a good move and is a logical choice. To follow this logic Magic Eden closed a partnership last year with Faraway - a crypto gaming company. Magic Eden became the primary marketplace for their genesis drop and powers game called āMini Royale - Nationsā in-game marketplace. The game can also be played directly on the Magic Eden under the āPlay Nowā tab. Another cooperation in the gaming space was concluded in January with Zoolana to launch its Alpha Blue NFTs.
According to Magic Eden the games can use launchpad to drop their in-game items, use Magic Eden infrastructure to power in-game marketplace experiences or leverage reach of the marketplace to acquire and engage new users.
Market share on Solana & comparison with OpenSea
Magic Eden has made its way eventually into top 10 NFT marketplaces across all blockchains. Based on DappRadar it is currently ranked 6th in terms of total volume reaching over $710 million since its launch in mid-September 2021. For comparing Magic Eden with other NFT marketplaces the most logical benchmark is OpenSea. Whereas OpenSea ~94% market share on Ethereum blockchain, Magic Eden climbed to a bit under 90% market share on Solana blockchain followed by Solanart and Solsea.
Based on analysis by Derek Walkush Magic Eden daily transactions were tracing cca 2.5x OpenSeaĀ“s, were up ~290% since October and about 10% MoM. It is safe to assume that low transaction fees as well as gas fees add a significant upside to nft trading on Solana blockchain and Magic Eden marketplace.
When looking at the comparison of average transaction value on OpenSea and Magic Eden nft marketplaces it becomes clear that transactions on OpenSea have significantly higher average transaction values, which directly affects the total traded volume.
Magic Eden goes MagicDAO
Magic Eden also decided to make a step closer to web3 dynamics via launching MagicDAO and airdrop NFT membership passes called Magic Tickets to existing users to benefit early supporters and expand projectĀ“s ecosystem over time. Magic Eden also put for a start 1000 SOL into the treasury to start things off. In the long term the treasury will be funded by 5% of creator royalties on secondary sales and 2% of trading fees from Magic Ticket. According to Magic Eden the initial perks of joining MagicDAO are being able to vote on governance aspects, be nominated as an advisor or vote on NFT collections. Detailed roadmap for MagicDAO can be found here.
Magic Tickets as gate-keeping tokens
The NFT membership pass that was airdropped is called Magic Ticket, which is a gate-keeping token for MagicDAO. It was airdropped to users of Magic Eden NFT marketplace based on their activity, but it is also possible to buy it on secondary market.
Magic Eden has in total airdropped 30 602 tickets and they were divided into three clasess i.e. OGs, Degens and Normies based on when the user made 1st transaction. The type of Magic Ticket defines the different roles of the individual in a community.
Both MagicDAO and Magic Tickets are according to Magic Eden a part of multi-year roadmaps. More information on this can be found in the litepaper.
MagicDAO
Once you have Magic Ticket in your wallet, you can verify yourself on Magic Eden Discord to access MagicDAO section. So far there is a section with announcements and community section with general topics but also special channels for individual community groups such as OGs, degens or creators. There is also MagicDAO alpha section with alpha channel that as often is the case looks more like shilling channel, another one to submit upcoming mints and also a channel for curated selection of upcoming NFT projects. From what it seems like the governance at this point is not a full governance model defining the future of Magic Eden but rather deciding about small issues such as what NFT collection will be on the homepage etc.
Wrap-up
When it comes to what Magic Eden has achieved so far I like what I am seeing. A strong team turning the project relatively fast into the biggest NFT marketplace on Solana with competitive transaction costs and unique features. I think leveraging partnerships through own launchpad is also with focus on gaming .or following web3 principles to airdrop Magic Ticket and launch of MagicDAO to involve the community.
In case Magic Eden would ever spill over to Ethereum ecosystem, it could prove to be a worthy adversary to OpenSea, Coinbase, Looksrare and other NFT marketplaces in the space. I think it is worth it to closely watch the next steps Magic Eden takes. I will further monitor this project (and maybe in time come with another updated view).
Update 13th March 22: Magic Eden completed a successful raise of $27M led by Paradigm (Series A) with undisclosed valuation. It seems like a logical move for Paradigm to back a strong project and also hedge itĀ“s bet on OpenSea.
It will be interesting to monitor the progress of Magic Eden further especially in case OpenSea adopts Solana or Magic Eden decides to adopt Ethereum blockchain. Magic Eden today also launched Eden Games, a content hub for game publishers.
š Want to dig deeper?
Articles:
Solana NFT Marketplace Magic Eden Is Airdropping Tokens, Launching DAO
Magic Eden x Faraway: How Marketplaces & Blockchain Games Can Grow Together
Rug Pulls Force Solana NFT Marketplace Magic Eden to Invoke Doxing Policy for Creators
List Your NFTs with Solanaās NFT Marketplace, Magic Eden, with 0% Listing Fees
š ļø Web3 tools & projects worth a note
Zookeeper.club - wallet explorer & wallet valuation app for Solana blockchain
NFT Scoring - analyzes and ranks NFT collections based on community engagement and more.
Flipper.zone - NFT analysis tool by Bankless DAO in the making, access via holding NFT, expected launch during this month, currently presale waves in their discord for Alpha Access community and Bankless DAO
š ļø Essentials - before you even start interacting in the space get a Phantom wallet. DEX that you can use on Solana is Raydium. To send e.g. Ethereum to Solana or any other cryptocurrency/stablecoin you can use Portal Token Bridge by Wormhole. Here is a step-by-step tutorial on how to use it.
āļø What are your thoughts on this? Are you working on a project in web3 space? Feel free to drop me a comment under the memo or reach out to me on Twitter. Happy to discuss & connect. WGMI. Circus Matt